BackJindal Group eyeing London Mining: Report
London Mining is battling big debts, crashing iron ore prices and the Ebola outbreak in Africa, where it has a mine
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London: Indian conglomerate Jindal Group is considering a last-minute move to acquire the debt-ridden UK firm London Mining Plc, a media report said on Sunday.
The company has been battling big debts, crashing iron ore prices and the Ebola outbreak in Africa, where it operates a mine. Its shares closed last week at just four pence after it said it was in talks with a strategic partner, but warned any deal could virtually wipe out investors, The Sunday Times said. A rescue would be likely to require lenders to accept big losses as well, the report said.
London Mining operates a small mine in Sierra Leone producing high grade iron ore but is expensive to run. Sierra Leone is one of the worst-affected African nations by the ebola pandemic. It has made matters worse for business, with cargo ships charging an extra $2 a tonne for docking in Freetown, Sierra Leone’s capital.
A takeover by Jindal, whose operations span cement to oil and steel production, could involve “African Minerals", the newspaper said without clearly identifying the Indian firm.
The London-listed miner founded by tycoon Frank Timis runs a bigger operation nearby. Its shares have also been hammered. Last week, it hired Standard Chartered Plc, London Mining’s biggest lender, to arrange $500 million in debt to see it through.
African Minerals Ltd owns a low-cost rail line and port that would allow London Mining to slash its delivery costs. Jindal is reported to have approached African Mining for an alliance.
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